What Happened?
A number of stocks fell in the afternoon session after the AVGO earnings overhang and the stronger-than-expected jobs report combined to drive one of the broadest global chip selloff of the year.
The damage spread globally: South Korea's Kospi fell 5.5%, with Samsung down 6.4% and SK Hynix nearly 10%. European names followed: ASML fell 3.8% and Infineon lost more than 6%. The mechanism is two-fold. Broadcom's guidance miss reset expectations for the pace of hyperscaler AI chip spending, removing the sector's most visible growth catalyst. The 172,000-payroll print then eliminated near-term rate cut hopes and introduced rate hike risk by year end per CME FedWatch. Semiconductor valuations, built on aggressive multi-year earnings assumptions, are acutely sensitive to these discount rate movements.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Analog Semiconductors company MACOM (NASDAQ:MTSI) fell 6.8%. Is now the time to buy MACOM? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company FormFactor (NASDAQ:FORM) fell 6.4%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.
- Memory Semiconductors company Seagate (NASDAQ:STX) fell 7%. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
Zooming In On Seagate (STX)
Seagate’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 6.9% on the news that AI chip leader Nvidia reported record sales and income, driven by what its CEO described as 'parabolic' demand for AI infrastructure.
The strong results confirmed investors' belief in a sustained AI-driven boom, lifting the entire semiconductor sector. Nvidia's success signals a massive buildout of data centers, which require a vast supply of high-performance chips. This directly benefits memory chip manufacturers like Samsung and SK Hynix, which produce essential components like High Bandwidth Memory (HBM).
The intense demand led some analysts to declare a 'semiconductor supercycle,' a prolonged period of above-average growth for the industry, as companies worldwide race to develop their AI capabilities.
Seagate is up 200% since the beginning of the year, and at $862.03 per share, it is trading close to its 52-week high of $940.69 from June 2026. Investors who bought $1,000 worth of Seagate’s shares 5 years ago would now be looking at an investment worth $8,738.
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